WASHINGTON - If the Biden Administration continues to stall offshore oil and gas leases in the Gulf of Mexico, it could hurt coastal parishes and Louisiana oil service companies, Lafourche Parish President Archie Chaisson III and Danos CEO Paul Danos told the House Subcommittee on Energy and Mineral Resources on July 27.
Chaisson and Danos, whose oilfield services company is HQ'd in Gray, La., told lawmakers that revenues will dry up if the U.S. Department of Interior fails to sell offshore leases.
The government's 5-year plan for those leases, supposed to have happen last summer, still isn’t complete and won’t be until the end of the year, and pushing the earliest possible lease sale into 2026.
The leasing gap has created uncertain operating conditions, Chaisson added. “We’re not just talking about ... little old Lafourche Parish, but policy that impacts every American” due to increased energy prices.
Offshore rigs in the GoM get food, water and equipment shipped out from Port Fourchon, La., which produces about 8,0000 jobs. There are 10,000 more jobs in the parish tied to the oil service industries. They buy groceries, eat at restaurants and frequent local businesses.
Lafourche Parish has received $1.6M in royalties from offshore production in federal waters this year.
The state added $124.9M to its treasury. The money goes towards coastal restoration and flood protection, but it only comes from production, he said.
The U.S. Department of Interior generated $794M from lease sales from 2018-20. Once the sales are complete, the winner has to jump through hoops and regulations that could take up to eight years, Danos said.
Lease terms generally are for 10 years.
President Joe Biden has sent conflicting imagery regarding onshore and offshore federal lease sales in favor of renewable energy sources. In 2022, Biden said “No more drilling.”
In February, the President acknowledged the need for oil and natural gas.
The administration is slow-walking those lease sales to bolster wind and solar energy as a replacement to "stop oil and gas production,” Rep. Bruce Westerman (R-Ark.), said.
Democrats say oil industry supporters are just whining.
The arguments "characterizing energy independence lose credibility when you discover the United States is currently exporting 50% more oil and gas than we did in 2019," said U.S. Rep. Alexandria Ocasio-Cortez (D-NY), the leading Democrat on the subcommittee.
Oil companies' profits last year was $200B+, she said, adding that of the 11M acres of leases, 74% have never produced oil and gas.
House Majority Leader Steve Scalise (R-La.) said the Biden Administration has "waged war on American energy," by canceling lease sales, delaying the offshore leasing plan, halting pipeline projects and issuing "unnecessary and devastating regulations" that result in higher costs to families, lost jobs and "dependence on hostile nations for our energy supply," he said. (NOLA.com 07/27/23) Delay in oil leases impacts bottom lines in Louisiana | Local Politics | nola.com
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